Reliance Industries
BSE SENSEX
32,402
S&P CNX
10,148
20 September 2017
Update
| Sector:
Oil & Gas
CMP: INR840
TP: INR941 (+12%)
Neutral
TRAI boost to RJio; increasing target price
The Telecom Regulatory Authority of India (TRAI) has reduced the interconnect usage
charge (IUC) from 14p/min to 6p/min with effect from 1 October 2017. This would
st
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
be further reduced to zero from 1 January 2020.
RIL IN
6502.0
861 / 466
4/22/42
5461.7
84.94
12,124
55.0
st
~40% reduction in RJio’s access cost would result in the company’s EBITDA increasing
by 43%/31% in FY19/20.
We also roll over our valuation to September 2018, and increase our target price on
Reliance Industries (RIL) from INR750 to INR950, implying a 13% upside.
Revising RJio’s EBITDA by 43%/30% for FY19/20E led by IUC savings
Financials Snapshot (INR b)
Y/E March
2017 2018E 2019E
Net Sales
2,420 3,237 3,723
EBITDA
433
524
565
Net Profit
314
367
408
EPS (INR)
48.3
56.5
62.8
EPS Gr. (%)
14.6
16.9
11.2
BV/Sh. (INR)
464
515
571
RoE (%)
11.6
12.1
12.1
RoCE (%)
9.1
10.2
10.7
P/E (x)
17.0
14.6
13.1
P/BV (x)
1.8
1.6
1.4
EV/EBITDA (x)
14.7
10.6
8.8
Shareholding pattern (%)
As On
Jun-17 Mar-17 Jun-16
Promoter
45.0
45.0
45.1
DII
11.1
11.6
13.0
FII
25.6
24.8
22.7
Others
18.3
18.6
19.3
FII Includes depository receipts
Stock Performance (1-year)
Reliance Inds.
Sensex - Rebased
900
800
700
600
500
400
Based on the reduction in the IUC rate, RJio’s access cost is revised down by
~INR30b (40%) to INR44b/49b for FY19/20E. Subsequently, we have revised up
our EBITDA estimates for FY19/20E by 43%/31% to INR91b/INR130b. Our
subscriber and ARPU estimates for FY19/20E remains intact at 132m/156m and
INR215/INR229, respectively.
Zero IUC by 2020 may not alter the scenario significantly. We believe that, by
2020, a significant proportion (70-75%) of subscribers would be data
subscribers. In the event of complimentary voice offerings, bundled (data and
voice) price plans should protect incumbents’ ARPUs.
RJio could choose market share over profitability
The key question is whether RJio will pass on the benefits to feature phone
subscribers to chase market share or will focus on enhancing profitability.
RJio’s current active subscriber market share stands at 9.6%. We believe RJio
will continue tapering freebies for smartphone subscribers, even as it may
extend discounts to feature phone subscribers to accelerate market share
growth.
Based on 43%/31% increase in EBITDA for FY19/20E, we increase our DCF-
based TP to INR190/share (ex. bonus; prior: INR130/share). Our DCF factors in
12% WACC and 2% terminal growth.
Increasing valuation multiples; maintaining Neutral
We have increased the refining and marketing multiples from 6x to 7x, driven
largely by the better performance exhibited by the company in its refining
segment in an adverse environment, due to its better risk and yield/crude
management.
Key triggers: (i) how the company further unfolds its strategy in RJio and (ii)
how other core expansions take shape.
The stock trades at 12.2x standalone FY19E P/E and 10.4x standalone FY19E
EV/EBITDA. We roll over to September 2018, and increase our target price on
RIL from INR750 to INR941, implying a 12% upside. Maintain
Neutral.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Swarnendu Bhushan – Research Analyst
(Swarnendu.Bhushan@MotilalOswal.com); +91 22 6129 1529
Abhinil Dahiwale – Research Analyst
(Abhinil.Dahiwale@motilaloswal.com); +91 22 3980 4309

Reliance Industries
Exhibit 1:
RIL: Key assumptions
Key Metrics
Exchange Rate (INR/USD)
Refining
Capacity (mmt)
Production (mmt)
Capacity Utilization (%)
GRM (USD/bbl)
Singapore GRM
Premium/(disc)
RIL GRM
E&P
Gas Production (mmscmd)
Oil Production (kbd)
Pricing
Brent Oil (USD/bbl)
Wellhead Gas Price (USD/mmbtu)
FY11
45.6
62.0
66.5
107%
5.2
3.2
8.4
56.2
18.9
87
4.2
FY12
47.9
62.0
67.6
109%
8.3
0.3
8.6
42.6
10.9
114
4.2
FY13
54.5
62.0
68.1
110%
7.9
1.4
9.2
26.5
9.1
111
4.2
FY14
60.5
62.0
68.1
110%
5.6
2.8
8.5
13.8
6.4
109
4.2
FY15
61.2
62.0
67.9
110%
6.4
2.5
8.8
12.2
6.6
86
4.2
FY16
65.4
62.0
69.5
112%
7.5
3.3
10.8
8.4
4.9
48
4.2
FY17
67.1
62.0
70.1
113%
5.8
5.2
11.0
7.8
3.4
49
3.2
FY18E
64.5
62.0
70.0
113%
6.8
4.4
11.2
6.3
2.6
FY19E
66.1
62.0
70.0
113%
6.0
5.4
11.4
5.4
2.3
FY20E
68.0
62.0
70.0
113%
6.0
5.4
11.4
4.6
2.0
50
55
55
3.4
3.4
3.4
Source: Company, MOSL
Exhibit 2:
RIL: Segmental EBIT break-up (INRb)
Segmental EBTI (INRb)
Refining
Petchem
E&P
Total
Segmental EBIT share (%)
Refining
Petrochemicals
E&P
Total
FY11
92
94
67
253
36%
37%
26%
100%
FY12
96
90
53
239
40%
38%
22%
100%
FY13
128
73
30
231
55%
32%
13%
100%
FY14
132
86
20
238
55%
36%
8%
100%
FY15
155
86
16
257
60%
33%
6%
100%
FY16
233
103
4
340
69%
30%
1%
100%
FY17
246
121
4
371
66%
33%
1%
100%
FY18E
254
133
7
394
FY19E
261
159
7
427
FY20E
260
169
4
433
64%
61%
60%
34%
37%
39%
2%
2%
1%
100%
100%
100%
Source: Company, MOSL
Exhibit 3:
RIL: Sum of the parts valuation (Sep-18 TP)
Core business
Refining
Petchem
E&P
KG D6
PMT
NEC-25
CBM
Shale
KG basin exploratory upside
Investments
RGTIL
Reliance Retail
RJio
Total
Net debt / (cash)
Target price
3 Book value
49 .7x FY19 sales
190 As per our telecom analyst
928
(13)
941
Value
Remarks/Methodology
347 7x FY19 EBITDA
305 7x FY19 EBITDA
33
5 DCF
6 DCF
2 USD 5/boe
4 USD 5/boe
(23) 7x EV/EBITDA FY19
39 USD 5/boe
20 September 2017
2

Reliance Industries
Reilance Jio: Story in charts
Exhibit 4:
Subscriber market share to get a fillip
Subsrciber base (m)
Subscriber Market Share (%)
13.1
14.1
14.9
0.10
Exhibit 5:
Data traffic to touch new highs
Data Traffic (b Mb)
0.12
0.11
Data realizations (INR/MB)
0.10
0.10
6,614
10.6
6.3
12.1
72
FY17E
132
FY18E
156
FY19E
174
FY20E
191
FY21E
205
FY22E
2,111
FY18E
3,428
4,399
5,443
FY19E
FY20E
FY21E
FY22E
Source: Company, MOSL
Source: Company, MOSL
Exhibit 6:
Subscribers (mn) across India
20 September 2017
3

Reliance Industries
Reliance Industries: Story in charts
Exhibit 7:
RIL’s earnings growth momentum on a recovery
track
24.9
PAT (INRb)
20.7
14.6
4.8
(1.2)
203
200
210
220
227
274
314
367
408
444
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
Source: Company, MOSL
4.7
3.3
PAT - YoY (%)
14.1
16.9
11.2
8.6
10.6
12.6
9.8
12.1
9.6
11.7
9.2
11.0
8.2
12.1 11.9
11.7 11.6 12.1
8.9
9.1
10.7 10.6
Exhibit 8:
Also, return ratios are expected to gradually
recover
RoCE (%)
RoE (%)
10.2
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
Source: Company, MOSL
Exhibit 9:
Refinery throughput to remain at 70mmt in FY18/19; GRM to stabilize
Refinery Thr' put (mmt)
8.4
8.6
9.2
8.6
RIL GRM (USD/bbl)
11.0
10.8
11.2
11.4
11.4
8.1
66.6
FY11
67.6
FY12
68.5
FY13
68.1
FY14
67.9
FY15
69.5
FY16
70.1
FY17
70.0
FY18E
70.0
FY19E
70.0
FY20E
Exhibit 10:
Expect petchem EBITDA contribution to increase, going forward, followed by refining
Refining
Petchem
E&P
Total
436
353
101
112
140
FY12
326
58
96
172
FY13
326
40
110
176
FY14
118
187
FY15
265
284
272
292
294
342
37
28
143
465
9
171
242
522
7
552
6
254
557
2
262
389
307
206
93
96
FY07
17
240
20
97
123
FY08
238
24
94
120
FY09
104
111
92
FY10
117
131
FY11
141
FY16
FY17
FY18E
FY19E
FY20E
20 September 2017
4

Reliance Industries
Reliance Industries: Story in charts
Exhibit 11:
Segmental EBIT
break-up
(%) - E&P a dampener,
refining and petchem outshine
100
80
60
40
20
0
39.8
Refining
Petrochemicals
E&P
56.2
42.6
26.5
13.8 12.2
8.4
7.8
6.3
5.4
4.6
Exhibit 12:
Expect E&P production to decline; though new
policy can boost long-term production (mmscmd)
Gas Production (mmscmd)
Source: Company, MOSL
Source: Company, MOSL
Exhibit 13:
RIL refining margins
improved in FY16
(USD/bbl)
after staying flat in recent years
Singapore GRM
8.4
3.2
3.3
3.6
5.2
8.6
Premium/(disc)
RIL GRM
10.8 11.0 11.2 11.4 11.4
3.3
5.2
4.4
5.4
5.4
Exhibit 14:
We expect petchem EBITDA to improve in
FY18/19
Petchem EBITDA (INRb)
171
9.2
8.5
2.8
5.6
8.8
2.5
6.4
262
242 254
143
6.9
0.3 1.4
8.3
7.9
111 117 112
7.5
5.8
6.8
6.0
6.0
96
110 118
Source: Company, MOSL
Source: Company, MOSL
Exhibit 15:
Dividend payout stabilized in recent years (%)
Dividend payout (%)
20
16
12
8
Exhibit 16:
RIL 1-year forward P/E chart (last 10 years)
38.0
30.0
22.0
14.0
6.0
14.4
9.7
9.1
P/E (x)
Min (x)
Avg (x)
+1SD
30.2
19.0
Max (x)
-1SD
13.8
Source: Company, MOSL
Source: Company, MOSL
20 September 2017
5

Reliance Industries
Reilance Jio - Financials and Valuations
Consolidated - Income Statement
Y/E March
Total Income from Operations
Change (%)
Tower Rental Cost
Spectrum and License Costs
Access and Roaming Charge
Employees Cost
Subscriber Acquisition/Servicing Costs
Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Minority Interest
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY15
0
NA
0
7
1
32
0
156
195
48,750.0
-195
-48650.0
34
-228
16
13
-231
0
-231
0
0.0
0
-231
-231
NA
-57,800.0
FY16
0
0.0
0
16
0
41
0
157
214
53,450.0
-213
-53350.0
43
-257
14
32
-239
0
-239
0
0.0
0
-239
-239
3.3
-59,700.0
FY17
FY18E
0
207,468
-50.0 103,733,900.0
0
72,891
17
22,821
0
36,475
60
17,820
0
52,599
355
26,000
432
228,607
216,200.0
110.2
-432
-21,139
-216100.0
-10.2
49
104,707
-481
-125,846
10
99,559
12
2,075
-479
-223,330
0
0
-479
-223,330
0
0
0.0
0.0
0
0
-479
-223,330
-479
-223,330
100.6
46,514.5
-239,550.0
-107.6
FY19E
395,669
90.7
104,600
43,524
51,459
19,246
63,381
22,000
304,209
76.9
91,460
23.1
103,254
-11,794
103,559
3,957
-111,397
0
-111,397
0
0.0
0
-111,397
-111,397
-50.1
-28.2
(INR m)
FY20E
476,039
20.3
125,707
52,364
58,637
21,825
67,488
20,000
346,021
72.7
130,018
27.3
101,274
28,744
109,559
4,760
-76,055
0
-76,055
0
0.0
0
-76,055
-76,055
-31.7
-16.0
Consolidated - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Other Current Liabilities
Provisions
Net Current Assets
Appl. of Funds
FY15
301,250
-508
300,742
296,929
597,671
10,256
1,398
8,858
722,978
7,924
80,392
0
270
80,121
222,480
0
222,298
182
-142,088
597,671
FY16
451,250
-747
450,503
470,078
920,581
11,825
2,428
9,397
1,183,499
8,333
156,037
0
153
155,884
436,685
0
436,286
399
-280,648
920,581
FY17
450,000
258,644
708,644
1,244,490
1,953,134
13,606
3,862
9,744
1,779,776
8,731
210,634
0
268
210,366
55,751
0
55,067
683
154,883
1,953,134
FY18E
650,000
35,314
685,314
1,244,490
1,929,803
2,048,000
108,569
1,939,431
0
8,731
82,440
17,052
34,267
31,120
100,798
28,184
51,867
20,747
-18,359
1,929,803
FY19E
650,000
-76,083
573,917
1,344,490
1,918,407
2,096,000
211,823
1,884,177
0
8,731
201,488
32,521
109,617
59,350
175,989
37,505
98,917
39,567
25,499
1,918,406
(INR m)
FY20E
650,000
-152,138
497,862
1,394,490
1,892,352
2,120,000
313,097
1,806,903
0
8,731
285,992
39,126
175,460
71,406
209,274
42,660
119,010
47,604
76,718
1,892,351
20 September 2017
6

Reliance Industries
Reilance Jio - Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS*
Cash EPS
BV/Share
DPS
Payout (%)
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
*Based on RJio’s number of shares
FY15
0.0
0.0
10.0
0.0
0.0
NA
NA
NA
0.0
0.0
274
0
0.4
-14.0
1.0
FY16
0.0
0.0
10.0
0.0
0.0
-0.1
0.0
0.1
0.0
0.0
91
0
0.4
-18.0
1.0
FY17
0.0
0.0
15.7
0.0
0.0
-0.1
0.0
0.9
0.0
0.0
365
0
3.8
-47.1
1.7
FY18E
-3.4
-1.8
10.5
0.0
0.0
-32.0
-6.4
-12.3
0.1
0.1
30
50
0.8
-1.3
1.8
FY19E
-1.7
-0.1
8.8
0.0
0.0
-17.7
-0.4
-0.6
0.2
0.2
30
35
1.1
-0.1
2.1
FY20E
-1.2
0.4
7.7
0.0
0.0
-14.2
1.8
1.6
0.2
0.3
30
33
1.4
0.3
2.4
Consolidated - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
Others
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Interest Paid
Dividend Paid
Others
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
-231
34
16
0
-27,827
-28,009
-8
-28,017
-95,351
-123,368
-5,338
70
-100,619
70,530
71,513
-13,453
0
0
128,590
-45
315
270
FY16
-239
43
14
3
-43,454
-43,633
-26
-43,659
-176,334
-219,992
-246
78
-176,502
150,000
102,861
-32,740
0
0
220,121
-40
193
153
FY17
-479
49
10
0
-33,637
-34,057
-1
-34,058
-385,398
-419,456
-242
61
-385,579
0
478,037
-58,188
0
0
419,849
212
56
268
FY18E
-223,330
104,707
97,484
0
207,241
186,102
0
186,102
-254,618
-68,516
0
2,075
-252,544
200,000
0
-99,559
0
0
100,441
33,999
268
34,267
FY19E
-111,397
103,254
99,602
0
31,492
122,953
0
122,953
-48,000
74,953
0
3,957
-44,043
0
100,000
-103,559
0
0
-3,559
75,350
34,267
109,617
(INR m)
FY20E
-76,055
101,274
104,799
0
14,623
144,641
0
144,641
-24,000
120,641
0
4,760
-19,240
0
50,000
-109,559
0
0
-59,559
65,843
109,617
175,460
20 September 2017
7

Reliance Industries
Reilance Industries - Financials and Valuations
Standalone - Income Statement
Y/E March
Total Income from Operations
Change (%)
Purchases
Manufacturing and Other Expenses
Total Expenditure
% of Sales
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income
PBT bef. EO Exp.
EO Items
PBT after EO Exp.
Total Tax
Tax Rate (%)
Reported PAT
Adjusted PAT
Change (%)
Margin (%)
FY15
3,290,760
-15.6
90,770
2,883,970
2,974,740
90.4
316,020
9.6
84,880
231,140
23,670
87,210
294,680
0
294,680
67,490
22.9
227,190
227,190
3.3
6.9
FY16
2,331,580
-29.1
84,120
1,853,990
1,938,110
83.1
393,470
16.9
85,900
307,570
25,620
78,210
360,160
0
360,160
86,320
24.0
273,840
274,170
20.7
11.8
FY17
2,420,250
3.8
3,220
1,984,470
1,987,690
82.1
432,560
17.9
84,650
347,910
27,230
87,090
407,770
0
407,770
93,520
22.9
314,250
314,250
14.6
13.0
FY18E
3,236,723
33.7
12,420
2,700,792
2,713,212
83.8
523,510
16.2
109,824
413,687
37,418
94,578
470,847
0
470,847
103,586
22.0
367,260
367,260
16.9
11.3
FY19E
3,723,331
15.0
0
3,158,186
3,158,186
84.8
565,144
15.2
119,877
445,267
30,375
108,825
523,717
0
523,717
115,218
22.0
408,499
408,499
11.2
11.0
(INR m)
FY20E
3,827,661
2.8
0
3,255,739
3,255,739
85.1
571,921
14.9
138,246
433,675
31,500
166,563
568,738
0
568,738
125,122
22.0
443,616
443,616
8.6
11.6
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Eq. Share Warrants & App. Money
Total Reserves
Net Worth
Total Loans
Deferred Tax Liabilities
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions
Net Current Assets
Appl. of Funds
E: MOSL Estimates
FY15
32,360
170
2,129,230
2,161,760
976,170
126,770
3,264,700
2,360,620
1,214,990
1,145,630
757,530
1,125,730
948,960
365,510
46,610
115,710
421,130
713,150
650,570
62,580
235,810
3,264,700
FY16
32,400
0
2,507,580
2,539,980
923,200
237,470
3,700,650
2,622,320
1,146,890
1,475,430
1,109,050
1,572,500
659,760
280,340
34,950
68,920
275,550
1,116,090
1,093,730
22,360
-456,330
3,700,650
FY17
32,510
0
2,850,620
2,883,130
1,013,030
247,660
4,143,820
2,584,480
1,053,180
1,531,300
1,341,890
1,924,500
669,770
340,180
54,720
17,540
257,330
1,323,640
1,289,780
33,860
-653,870
4,143,820
FY18E
65,020
0
3,132,394
3,197,414
650,000
247,660
4,095,074
3,557,650
1,362,651
2,194,999
735,868
1,924,500
1,092,010
452,254
70,942
432,065
136,749
1,852,303
1,773,547
78,756
-760,293
4,095,074
FY19E
65,020
0
3,481,968
3,546,988
700,000
247,660
4,494,648
3,707,650
1,482,529
2,225,121
635,868
1,924,500
1,835,825
520,246
81,607
1,077,030
156,942
2,126,667
2,040,181
86,486
-290,841
4,494,648
(INR m)
FY20E
65,020
0
3,861,593
3,926,613
700,000
247,660
4,874,273
3,757,650
1,620,775
2,136,875
635,868
1,924,500
2,367,472
534,824
83,894
1,586,838
161,916
2,190,441
2,097,348
93,093
177,030
4,874,273
20 September 2017
8

Reliance Industries
Reilance Industries - Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
FCF per share
Return Ratios (%)
RoE
RoCE
RoIC
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Leverage Ratio (x)
Current Ratio
Interest Cover Ratio
Net Debt/Equity
FY15
34.9
48.0
348.1
4.5
15.7
23.5
17.1
2.4
1.9
19.6
0.6
2.2
11.0
8.2
13.9
1.4
1.0
41
5
72
1.3
9.8
-0.1
FY16
42.2
55.4
409.0
4.8
13.5
19.5
14.8
2.0
2.7
15.8
0.6
40.6
11.7
8.9
21.1
0.9
0.6
44
5
171
0.6
12.0
-0.3
FY17
48.3
61.4
464.3
5.5
13.3
17.0
13.4
1.8
2.6
14.7
0.7
28.0
11.6
9.1
29.6
0.9
0.6
51
8
195
0.5
12.8
-0.3
FY18E
56.5
73.4
514.9
7.0
14.4
14.6
11.2
1.6
1.7
10.6
0.8
127.7
12.1
10.2
34.6
0.9
0.8
51
8
200
0.6
11.1
-0.5
FY19E
62.8
81.3
571.2
7.7
14.4
13.1
10.1
1.4
1.3
8.8
0.9
100.6
12.1
10.7
37.3
1.0
0.8
51
8
200
0.9
14.7
-0.6
FY20E
68.2
89.5
632.3
8.4
14.4
12.1
9.2
1.3
1.2
7.8
1.0
88.2
11.9
10.6
42.7
1.0
0.8
51
8
200
1.1
13.8
-0.7
Standalone - Cash Flow Statement
Y/E March
OP/(Loss) before Tax
Depreciation
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
Others
CF from Operating incl EO
(Inc)/Dec in FA
Free Cash Flow
(Pur)/Sale of Investments
CF from Investments
Issue of Shares
Inc/(Dec) in Debt
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Opening Balance
Closing Balance
FY15
294,680
84,880
-67,490
174,450
486,520
4,620
491,140
-476,820
14,320
-231,110
-707,930
-750
36,600
-35,590
260
-216,530
332,240
115,710
FY16
360,160
85,900
-86,320
560,590
920,330
110,700
1,031,030
-767,220
263,810
-446,770
-1,213,990
141,380
31,790
-37,000
136,170
-46,790
115,710
68,920
FY17
407,770
84,650
-93,520
146,160
545,060
10,190
555,250
-373,360
181,890
-352,000
-725,360
70,638
89,830
-41,738
118,730
-51,380
68,920
17,540
FY18E
470,847
109,824
-103,586
520,947
998,031
0
998,031
-167,500
830,531
0
-167,500
0
-363,030
-52,976
-416,006
414,525
17,540
432,065
FY19E
523,717
119,877
-115,218
175,514
703,891
0
703,891
-50,000
653,891
0
-50,000
0
50,000
-58,925
-8,925
644,966
432,065
1,077,030
(INR m)
FY20E
568,738
138,246
-125,122
41,936
623,798
0
623,798
-50,000
573,798
0
-50,000
0
0
-63,991
-63,991
509,808
1,077,030
1,586,838
20 September 2017
9

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a)
from time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and
earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other
potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s),
as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the
research report.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in
the past 12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
a)
managed or co-managed public offering of securities from subject company of this research report,
b)
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
c)
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
d)
Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL and / or its affiliates do and seek to do business including investment banking with
companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research
Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to,
copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOSL. The report is based on the facts, figures and information that are considered
true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not
been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice.
The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though
disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Reliance Industries
Disclosure of Interest Statement
Analyst ownership of the stock
Reliance Industries
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with
Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any
investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research
Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is
not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional
investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S.
registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person
or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of
offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or
appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations
as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time
without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities
mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities
functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is
being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or
representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
MSE(F&O): INF261041231; MSE(CD): INE261041231; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset
Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth
management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd. offers Commodities
Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
20 September 2017
10